Just like council tax and the TV licence fee, home insurance is one of those items that you have to spend money on even though you might not want to. If you’ve paid home insurance for the last ten years or more and never made a claim, paying out for something that’s not likely to happen to you can be frustrating.
However, home insurance is there to cover us if something really bad happens to our home (damage, fire, flood, and so on) or to what we have inside our homes (white goods, furniture, valuables, and more). There is so much competition between home insurance providers that we decided to put together this easy-to-follow guide on everything you need to know about getting the right home insurance for you.
Best home insurance – biggest providers
There are hundreds of different home insurance companies in the UK and even more home insurance brokers.
- Direct Line
- Domestic & General
- Grove and Dean
- Legal and General
- Lloyds Banking Group
- London General Insurance
- NFU Mutual
- One Call Insurance
- Policy Expert
- TESCO Bank
How much does home insurance cost?
Home insurance can be as cheap as £50 a year going up to £600 or £700 a year depending on your home, where it’s located, how much it would cost to rebuild if it was destroyed, the material it’s made from, the contents kept within it (and sometimes taken outside it) and more.
Later on in this article, we’ll be looking at just how home insurance quotes vary from company to company and from policy to policy. It always pays to shop around and our example will show you exactly why.
Best home insurance policies
You can build a home insurance policy to provide you with the coverage you need for both the building and the contents with it. What do you need to know?
Buildings insurance covers the bricks-and-mortar structure of your home against damages from unforeseen events like fires and flooding.
Many mortgage providers require you to take out buildings insurance before they lend to you. That’s because their loan is essentially an investment in your property that, without the appropriate insurance in place, could mean that they lose a lot of money should something happen to your home.
Even if you buy your home outright, buildings insurance is still a necessity. If your home is damaged unexpectedly, you could find yourself facing a large and significant repairs bill upfront that you have to find the cash for rather than meeting those bills by just claiming on your insurance.
While your home may be protected by your buildings insurance, items like your furniture and your other personal belongings will not be covered without also having contents insurance.
If you rent your home, the buildings insurance will be the responsibility of your landlord however your contents are your personal responsibility. Contents insurance gives you the peace of mind of knowing you won’t need to pay out to replace your belongings should disaster strike.
You can also extend your contents insurance to cover loss and theft outside of your home, as well as accidental damages to your phone and other expensive items.
Building and contents insurance
Buildings insurance alone is perfect for landlords whereas standalone contents insurance is only really ideal for tenants. Homeowners on the other hand are responsible for both their property and their belongings, making joint building and contents insurance an absolute necessity.
Combining these policies tends to work out much cheaper than if you were to buy them separately. Make sure you compare the premiums you’ll pay to ensure you’re getting the best deal and ensure you are receiving adequate cover for both your buildings and your contents.
Student accommodation doesn’t just contain the smartphones, computers, laptops, and expensive books for one person but for often four or more people. This makes shared houses particularly attractive targets for burglars.
Before you head to university, it is always a good idea to take out contents insurance to protect your belongings in student accommodation. Even if you’re sharing a house with your friends, you’ll need to each take out your own student insurance policy in order to be covered.
Some insurers may allow your parents to add you to their own contents insurance policies however this will need to be extended to cover areas outside of the family home but doing this can quickly become expensive.
Alternatively if you rent your home, you can get specialised tenants’ contents insurance to protect your belongings.
Should a fire, flood, or other disaster strike your home, your landlord will be responsible for repairing any damages to the structure of the property like your kitchen or bathroom fittings. However, you will only be able to claim on your own furniture, clothes, and technology if you have your own tenants’ insurance policy in place.
Most insurers will also cover accidental damage to your landlord’s fixtures, fittings, and content in addition to your own. This means that you could make a claim to clean or replace stained curtains or carpets to protect your damage deposit at the end of your tenancy.
In the event of a flood, flooding cover compensates you for damage to the structure of your home. You also need to ensure you have suitable contents insurance to cover the cost of replacing any of your belongings which may be affected by water damage.
Home insurers are not able to refuse your application simply because you live in a flood risk area. As long as the government continues to fund flood defences in your region, you will still be entitled to home buildings and contents insurance (although you will almost certainly have to pay a higher premium).
Subsidence is when the foundation of your home collapses or starts to sink into the ground. This could be caused by leaking drains which soften the ground beneath your home or by moisture in the ground being absorbed by trees or by the soil.
Early signs that your home could be suffering from subsidence include sudden cracks appearing in plaster or brickwork that are wider at the bottom, doors and windows starting to stick for no reason, and rippling wallpaper without signs of damp.
Buildings insurance only tends to cover subsidence damage to your home itself. All surrounding areas such as your garden walls, patio, or driveway will not be covered in your policy unless your home is damaged by it
What can you add onto your home insurance?
Home insurers also give you the option of adding extra so that you can customise your policy to your exact needs. These additional terms help to provide further protection to your property and belongings in the event of loss or damage that would otherwise have not been covered.
Home emergency cover
This home insurance add-on gives you access to a 24-hour emergency helpline to get in touch with insurer-approved tradesmen as soon as you need them. Home emergency cover is perfect for boiler breakdowns and burst pipes that need fixing quickly.
Your policy will cover the cost of calling out an expert at any time of day as well as the labour and material for repairs. Some insurers also pay out for alternative accommodation if you are unable to stay in your home while repairs are taking place as part of your cover.
While some events are completely out of your hands, such as a leaking pipe or subsidence to your home, other damages may be caused by simple accidents. Not all home insurance policies automatically cover the latter and this is why many homeowners choose to add on accidental damage protection to their existing policy.
Should you spill red wine on the carpet, a football break your window, or your hyperactive toddler manage to destroy your television by banging it repeatedly with a drumstick, your accidental damage insurance would cover the cost to either repair or replace the item entirely.
Home contents insurance generally covers the loss or damage for all items including mobile phones, jewellery, laptops, bicycles, and all manner of valuable items you own. But the chances are that all of these belongings aren’t within the confines of your home 24/7, 365 days a year.
Personal possessions cover insures your belongings against loss, theft, and accidental damage when you take them outside of your home. That means you can confidently use and wear your belongings everyday knowing they are covered should the worst happen.
Good solicitors don’t come cheap. If you should need legal advice following an accident, issues with selling your home, or a dispute with a tradesman, a legal expenses add-on to your home insurance policy should cover your costs.
Let’s say that you sell your home and the buyers take you to court over the condition of the boiler or over some previous work that has been completed on the property. Whether you’re making a claim against another person or someone is involving you in a legal dispute, then you’ll be covered up to an average maximum of £50,000.
Your digital belongings need protection too. If you download music, films, games, or books onto your devices, the damage, loss, or theft of your technology could leave you out of pocket and without your entertainment.
While your phone or laptop may be covered under your existing policy, the data on it should enjoy the same level of protection. Many home insurers have cottoned on to the new way we experience music, TV, and movies and now they include a digital download option in your home contents policy.
How are home insurance premiums calculated?
The amount you pay each month or year for your home insurance will depend on a wide variety of factors which affect an insurer’s opinion on the risk to them for providing you with cover.
Value of contents
Because your home contents insurance is designed to cover the cost of replacing all of the important items in your home, you’ll need a policy worth at least their collective value. Of course, the more your belongings cost to replace, the more you can expect to pay to insure them.
It is important to remember that your contents aren’t just smaller items throughout your home. In fact, fixtures and fittings like your carpets and bathroom cabinets should all be included in your home contents insurance policy.
Even the materials your home is built out of can have a material impact on your insurance premiums. This also goes back to the risk to your insurer.
Understandably, buildings made from modern construction materials are less likely to need repairing much in the foreseeable future. That means that insurers will offer you a more favourable rate for a newer home.
However, if your property was built mainly from timber, has a flat or thatched roof, or was converted from an unusual building like a barn, your premiums will be higher.
Home insurers often use postcodes as a method of setting their premium rates. That’s because they allow home insurance companies to quickly work out your property’s risk level.
If your home is in a high flood risk area or experiences subsidence issues frequently then you may struggle to get the best building insurance prices. Similarly, your contents insurance premiums will probably increase if your street has a particularly high crime rate.
This all indicates to your home insurance company that they are more likely to have to pay out on repairs and replacements you claim for meaning they adjust their prices accordingly.
What measures do you have in place to protect your home? Homes with adequate systems in place to prevent burglaries are not only safer but they’re also cheaper to insure.
Top home insurance providers will expect at least a minimum level of security such as locks on your doors and ground floor windows. The higher grade and more secure these locks are, the lower your premiums will be.
On top of this, properly securing your home also ensures your insurer will reimburse your losses if you’re the victim of a burglary. It may be worth investing in more hi-tech security before you apply to make sure you get the best value home insurance possible.
In town or in the country?
Along with your specific postcode, home insurers will also look at whether you live in an urban or rural location. Cities and the countryside each have their own specific risks which affect the level of premiums on your home insurance policy.
While crime rates tend to be higher in the city, therefore making break-ins more likely, rural towns tend to have higher flood risks and they’re also further away from emergency services.
Your claims history
As your home insurance premiums are designed to reflect your risk to the insurer, if you’ve made claims in the past, this can have a significant effect on your final price. Even if these claims were made for good reason, they can still impact on your ‘risk profile’ as you’re seen as more liable to make a claim again.
This is why you tend to see ‘no claims discounts’ advertised when you have not made any claims in recent years. This varies from lender to lender but you will generally pay less for your insurance if you do not have a history of making many claims on your insurance.
Top 20 home insurance quotes
For our quote, we’ve made the following assumptions:
- The home is worth £300,000 and it would cost £200,000 to rebuild from scratch
- Building and contents insurance (including accidental damage)
- All other forms of add-ons do not form part of the policy unless given away as part of a policy (including but not limited to home emergency cover, family legal protection, gadget insurance, specified higher value items cover, bicycle cover, and cover for items outside the home)
- Payment to be made as a one-off and not as a monthly sum.
The buildings cover excess and the contents cover excess shown on the table are the grand totals of the voluntary excess and the compulsory excess for that particular feature.
|Provider||Annual Price||Building cover||Building cover excess||Contents cover||Contents cover excess||Legal expenses||Home emergency||Higher value items|
|Legal and General||£163.82||£1,000,000||£350||£60,000||£350||Yes||Yes||No|
|One Call Insurance||£187.44||£200,000||£350||£50,000||£350||Yes||Yes||No|
|Grove and Dean||£204.31||£200,000||£350||£50,000||£350||Yes||Yes||No|
Home insurance FAQ
Are home insurance claims taxable?
You will not need to pay tax on the money you are paid when you make a successful home insurance claim. If you need to repair your home or, in more serious cases where the property has been completely destroyed, replace it, then no tax will be owed.
However, this only applies to your personal residence. If you were to make an insurance claim on an investment property, then you must ensure you reinvest the money to repair or replace the property quickly or the claim money may be considered a taxable gain.
Can a home insurance policy be cancelled?
By law, the first fourteen days of your home insurance policy are the ‘cooling off period’ during which you can cancel your policy no questions asked. You’ll be refunded the insurance premiums you’ve paid minus the payment to cover the days your policy was in force.
After this time, you can still cancel your policy but it is a little more complicated. If you haven’t made any claims yet most insurers will give you a pro-rata refund for the remainder of your policy term minus their charges and any discounts you received when taking out the policy.
Can a home insurance company drop you?
Home insurance companies can cancel your coverage at any time but they won’t do this without a reason. Some of the more common reasons behind cancellation include:
- making too many claims above the average amount,
- having a roof over thirty years old that risks easy damages, and
- having certain breeds of pets.
Make sure you understand your policy terms and perform regular maintenance on your home to mitigate any potential problems. Also try to avoid using your insurance policy as a maintenance policy for many small claims and instead try to save it for larger issues to keep your home covered.
Can home insurance be paid monthly?
When taking out your policy some insurers will give you the option of paying the entire annual bill up front or spreading the cost of your home insurance over the year in monthly instalments.
While you avoid a lump sum bill with monthly repayments, this can end up costing you more in interest over the term of your policy.
Can home insurance companies deny you coverage?
Insurance companies have their own criteria when it comes to accepting someone for coverage. This will depend on personal circumstances including your insurance score (based on your credit score), claim history, and the current conditions of your home.
If your home has existing damage, it has too many potential hazards, or you do not meet their criteria in any other way, you can be denied home insurance coverage.
Can home insurance be transferred?
If you are moving home but you still have an active home insurance policy, then you may be able to transfer the cover across to your new property. You will need to speak to your insurer beforehand to make sure this is possible and you may be charged for the transfer.
The premium you pay is based on your postcode and the type of property you live in so your insurer must be informed of your new address and property details as soon as possible to recalculate your premiums.
Can home insurance companies check previous claims?
Much like when applying for a loan, insurers can see your claims history when deciding whether or not to cover you. They can check your previous home insurance claims as well as any refused or declined insurance applications.
Insurers base the amount they charge you according to the risk they perceive. If they think you’re more likely to make a claim and that you’ll cost them money, they will likely charge you more for your coverage.
Can home insurance cover mobile phones?
With many smartphones now worth over £700, it makes sense to protect them from loss, theft, and damage under your home contents insurance. Mobile phones tend to be automatically covered like any other item in your home.
That means it’s covered if it is lost or stolen in your home (such as in a burglary) or damaged in a fire or flood. You may need to upgrade your contents insurance to include coverage for other everyday risks such as accidental damage or protection outside of the home.
Can home insurance automatically renew?
Many home insurers will have an auto-renew clause in their policies which means that, unless you request otherwise, your cover will roll over automatically when you reach the end of your existing policy. Although rare, some insurers will charge a renewal fee for this.
You’ll receive a letter from your insurer to let you know the details of your new policy and the rate of premiums for the next policy year. Your cooling-off period will also be refreshed so you can cancel within the first fourteen days of your new contract.
How much home insurance do I need?
The amount of buildings and contents insurance you need will, of course, depend on your building and its contents. You need only insure the amount it would cost to rebuild your home, not its market value. This is based on your home survey report from when you purchased your home.
You will also need to work out how much your contents are worth collectively. These figures together will help you work out just how much home insurance you need to adequately cover your home.
Which home insurance company is cheapest?
There are a number of factors that can affect the premiums you are charged for your home insurance and these will not be the same for every insurance company you come across.
Your postcode, property structure, your contents’ value, security systems, and other considerations can drastically change the price of your home insurance. That is why it is so important to shop around by both using comparison sites and applying direct to insurers to find the policy best suited to you.
Should I use a valuation calculator?
When working out how much home insurance you need, you should look at both the value of your contents and also the cost to rebuild your home entirely. By doing that, you can rest assured that you would have enough cover should your home be burgled, damaged, or destroyed entirely.
You can use online contents calculators like this one from Confused.com to find out how much your possessions are worth, and a residential rebuilding cost calculator such as the BCIS’s tool to work out exactly how much cover you need.